Engineers, unlike CAD vendors, don't think of such things as a mid-range market for CAD, says Walske. They think instead of using CAD to improve their designs, do them more cost effectively and do them faster. In that sense, there is no mid-range market for CAD. And since they, the customers, don't think of a mid-range market, there isn't one, he says.
Design News: It's been almost a year since you acquired Computervision. What were the major corporate culture and product issues you had to resolve?
Walske: The cultural issues were not as profound as people thought. Both companies were based in Massachusetts. But, there had been an erosion of discipline at Computervision. People made decisions under pressure that they otherwise might not have made. Investment in the product had deteriorated more than we thought. We bought the company because it had a strong client base, an enterprise data management product, and talented people on the development side. We added a lot of assets to the development organization. CADDS 5 now has the same number of people working on it as Pro/ENGINEER. We've resolidified the technology base of CADDS 5, Optegra, and the goodwill of the company. Most people thought we would force everyone to use Pro/ENGINEER, but we believe CADDS 5 has a long life--in fact, it will be here as long as Pro/ENGINEER. We are building interoperability between the two through our Topology Bus. We picked up great talent from Computervision. For example, John Stevenson, who ran their DesignWave, now has responsibility for development of technology in Pro/ENGINEER too.
Q: What is your strategy for the so-called mid-range market?
A: There is no such thing as the mid-range market. What customers are buying is the ability to complete their designs faster, with higher quality and lower cost. Recently, some vendors have developed low-cost modeling to handle design tasks. We thought lower cost was lower functionality. We were wrong. But, a tool that won't finish the design task is doomed to failure. We re-packaged Pro/ENGINEER and broke out the core modeling functionality. It's a usable module for $5,995. You can configure to customer requirements with it. You can complete the design task and then add management and analytical functions to fill out the product suite.
Q: Interoperability is a key issue for design engineers today. What are vendors doing about it?
A: Customers need to drive their core vendors to force interoperability. Today there is IGES and STEP. The latter is better, but still inefficient. Interoperability is a problem. If competitors open up their architecture to us they are afraid that they will lose revenue and sales. Customers must drive interoperability.
Q: Prices seem to be declining in CAD. Will that continue, and if it does how far down will they go?
A: They will go down to about $14,000 to $16,000. When we entered the industry, CAD's price point was about $60,000 or $70,000. Pro/ENGINEER drove it down to $22,000. Now, we are at that $14-$16,000 level.
Q: PTC has been trying to penetrate the auto industry in the U.S., which seems to be locked up by other vendors, including SDRC, IBM/Dassault, and Unigraphics sanctions. What progress have you been having?
A: Pro/ENGINEER is the standard for chassis and powertrain in Europe, and we are developing great technology for body engineering. Automotive and aerospace manufacturers have long life cycles. They are less focused on incremental improvements and more on stability of the process.
Q: After all these years, has CAD become a commodity item ?
A: That is certainly the perception in the industry. A few years ago, we realized we had defined our limit as geometry. Now, we will extend data throughout the enterprise to non-geometric functions. With Computervision, we have found the right approach. With our Windchill product, we are shaking hands with ERP and Bills of Materials, and that dwarfs the CAD opportunity because it's more all-encompassing. We will create information and transfer it throughout the enterprise. Parts classification and process planning are two other non-geometric functions we will tie into.
'Customers must force interoperability.' Walske joined Parametric Technology Corp. in December 1986 as its president and CEO. He guided the company from its start-up phase through its initial public offering in December 1989 to its current position as a leader in the CAD/CAM market. Under his guidance, the company has achieved strong growth performance and now exceeds $1 billion in revenue.